Europe's Copyright Strategy: Have Europeans Send As Much Money As Possible To US Companies

from the that-doesn't-make-much-sense dept

Joe Karaganis, from the Social Science Research Council (SSRC), has a fascinating blog post, in which he digs in a bit on the European approach to copyright law and notes that the end result is basically to divert as much money as possible to US interests and away from EU citizens. In typical SSRC fashion, the reasoning is pretty detailed. He looks at the audiovisual industry -- where he notes that Europe imports a hell of a lot more from the US than they export out:

About 56% of those imports ($8.35 billion) come from the US. The EU, in turn, exports about $1.7 billion to the US, resulting in a net negative trade balance of around $6.65 billion. This does not include software licenses, where US companies monopolize larger parts of the European consumer and business markets.

From there, he looks at who actually benefits from stricter enforcement, and who benefits from infringement. And it's not hard to see that it's basically the US companies who will get a massive amount of the benefit... and its EU consumers who will lose out under a stricter regime. In the end, the result is pretty clear: stricter IP enforcement in Europe will do little to "protect" European heritage and culture, and will actually serve to take away from it, and push more money to US legacy entertainment companies.

It is important to be clear about the future that the EC is promoting with its IP policies. It is not a defense of European heritage or–primarily--a vision of the French auteur able to bring his or her distinctive vision to a global audience. It’s a vision of European production companies as slightly better integrated junior partners in global Hollywood.

It’s this junior partnership that should be weighed against the wider sacrifices of privacy and freedom of speech built into so many recent national and EC-level IP enforcement policies, such as the French ’3-strikes’ plan, which will cut French citizens off of the Internet for the piracy of Hollywood productions. Strong enforcement reinforces status quo positions in the market, but at an escalating public cost as consumer behavior becomes the real focus of enforcement activities. There is nothing in these policies will alter the balance of cultural power or change the direction of payments. That’s why I’ve characterized the EC enforcement plan as: “send money to the US.”

It's important to recognize all of this, because the rationale being bandied about in Europe for greater copyright protectionism is the belief that it will actually help "protect" local culture. And yet, as Karaganis details in his post, there's little evidence to support this, and most of the evidence seems to support a result that is entirely counter to that. The deal on things like ACTA is so bad for EU interests that Karaganis wonders just what the hell happened to get the EU to be in a position where it appears to be negotiating against its own best interests. Turns out, US lobbyists are pretty good at what they do, and have convinced clueless EU bureaucrats to support their own cultural demise by having them focus on nostalgia and putting up smoke and mirrors when it comes to the actual economics:

How did Europe get here? Tellingly, there was initially little European enthusiasm for a broad trade agreement on IP in the 1980s. By most accounts, lobbying by US tech and pharmaceutical industries made the difference, capitalizing on a wider overestimation of–and nostalgia for–Europe’s role as a cultural superpower, when it was the primary beneficiary of stronger international IP laws. More narrowly, the European Commission’s IP activism can be traced to the actions of a handful of American CEOs, who convinced their European counterparts of the benefits of a global IP deal in the run-up to the WTO agreement in the 1980s. Those counterparts, in turn, applied pressure on their national governments and, through them, the EC.

One way to get out of that mess, is to take the "moral" argument out of the copyright debate, and focus in on what really matters: the economics. This is a trade discussion and morality plays no role. But the EU politicians think that this is a moral issue, while the US negotiators, at the pushing of a few key industries, has convinced the EU to sell out its own economic and cultural best interests, by pretending this is a moral debate.

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No. We discussed a different story that cover some similar ground. But, it's not the same story, nor is the one above about US officials promoting Microsoft in Bosnia. You may be unable to handle more than one story in a certain area at a time, but new developments do tend to enter conversation when discussing news. Sometimes they overlap or form a theme, but that is how things sometimes work.

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Does it? It didn't answered by the first responder?

Oh wait, in order for it to be answered it has to be on your terms, I forgot that part. In no way could actually answering the question be considered an answer, in your view, because that would shut you up.

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Uh, yeah, I already explained why it's completely different - but way to skip that response entirely and take the easy bait. Do you think that saves face for you? Do you think we are so easily distracted?

And so what?

If Europe wants the US to pay a fair price for its goods then Europe needs to return the favor. If Europe wants Americans to be able to afford to come visit and throw money all over Paris, Rome, Berlin etc. then it needs to help the Americans make some money and that means paying for the drugs and the movies.

So what if Europe pays more in copyright licenses than it gets. It's called trade. They probably collect more in tourism and it all balances out.

Re: Re: Re: And so what?

I realize this might cause some discomfort, but an ad and subscription based service voluntarily negotiated means that the content producers receive income, assuming, of course, that the service is able to achieve successful market penetration.

The is a significant difference between working out a business deal with Facebook on the one hand, and on the other having your products disseminated to the world by persons who cannot be troubled to try and work out a deal.

Re: Re: Re: Re: And so what?

This may cause discomfort but those 750 million people don't care, they are getting music for free.

And if piracy causes $58 billion dollars in lost revenues because people get stuff for free this must be wrong it will cause irreparable damage since it encourages people to keep getting stuff for free and not respecting copyrights.

Re: Re: Re: Re: Re: And so what?

"This may cause discomfort but those 750 million people don't care, they are getting music for free."

This may cause discomfort but those 750 million people don't care, they are getting TV for free.

This may cause discomfort but those 750 million people don't care, they are getting radio for free.

That's why nobody ever sold a TV show or cable subscription, right? Why no song played on the radio sells a single copy?

"And if piracy causes $58 billion dollars in lost revenues"

It didn't.

"it encourages people to keep getting stuff for free and not respecting copyrights"

You fail at the very basis of your own argument. It's sad, but you refuse to learn even the most basic concepts and then try to pretend you hold the high ground in any argument (offering no proof beyond some kind of religious faith that his opinion must be true). It's sad.

Re: You've just admitted stronger enforcement brings more revenue.

No, this article doesn't say enforcement will lead to more revenue. In fact, I believe Mike has always argued that enforcement will not lead to more revenue. What he is pointing out here, is that the mistaken attempt at enforcement by the EU due to Hollywood pressure will fail. Even if it did succeed, it will be at great cost to the EU and benefit of the US, namely Hollywood.

So no, the industry strategy will not work or it would have shown signs of working by now. Have you seen any sign enforcement works? After all, we have had a decade or two of attempts with no sign of success yet.

Don't be so negative, it's just like the war on drugs, or prohibition of alcohol in the last century, just because it hasn't worked up to now doesn't mean it won't magically start working tomorrow, if we just stick with it.

Re: You've just admitted stronger enforcement brings more revenue.

as an aside,
and why is the automobile industry "so much" the otherway.
Could it be because back in the day, the big US companies got the legislation they wanted to protect the way they wanted to do business but because you can't hold back innovation with legislation; they ultimately inflicted dire wounds on themselves by getting what they wanted at the time.

So I want to see how they will bold with a new generation of content producers that pay better to directors and writers and have a true global reach and are not encumbered by regional exclusive contracts.

There is no "moral" in the argument

One way to get out of that mess, is to take the "moral" argument out of the copyright debate, and focus in on what really matters: the economics

There's very little 'moral' aspect to the argument these days, that's the problem. If anything it's egregiously absent.

What really matters is the ethics. The economics will sort themselves out. Human rights come first. Anachronistic privileges in the form of 18th century reproduction monopolies come last. It's not as if mankind is unable to cope with a free market.

We should stop fining, bankrupting, extorting, imprisoning, and extraditing people for infringing a state granted monopoly - not because it's uneconomic, but because it's unethical!

The moral side

Actually, because of the different background to copyright in Europe and the US, there really is a "moral" component here, from the European side, at least.
In the US, copyright has an entirely economic rationale (strictly "to promote the progress of science and the useful arts"), but in Europe there's also the "moral rights" side of things (hence the name "droit d'auteur" in French, for example).

What is really funny in all of this is that the discussion is sort of pointless because there is no such thing as absolutely balanced trade.

Few Americans are lining up to see the top rated movies from Sweden in wide release in the US, but much of what comes out of Hollywood is highly in demand overseas. The US makes a product that the Europeans want, and they don't make a product that Americans particularly want.

By the logic of this study, the oil producing countries should be forced to buy an equal amount of US good to offset their sales of oil to America. It's a laughable concept.

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It is the logical starting point, and it is a fail. Natural trade between countries is never balanced. The US is a powerhouse in the IP world. Trade imbalance is pretty much a natural state of affairs, especially when you look at a narrow industry field as opposed to overall circumstances.

Enforcement of IP laws will always end up favoring whoever is producing the content that is in demand. It should be the catalyst in the EU for companies and individuals to work to produce IP that has as much value to the population as what comes out of the US.

It isn't the American's fault that they are better at it than the EU countries.

Should the US somehow limit exports of IP to the EU to keep things balanced? Should the EU countries artificially enforce "culture" laws on their people, depriving them of what they want in order to support what is made at home?

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"It isn't the American's fault that they are better at it than the EU countries."

I wonder if you're aware of the vast amount of foreign talent that not only built Hollywood but keep it running to this day? Hollywood would be a very different place without European artists.

A shame that you have enough money to keep poaching the talent of other nations, but I'm sure you'll find that the success of Hollywood movies only has a partial relevance to them being American productions.

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Actually, the US is better at the funding and rehashing old stories with a new spin, as a hell of a lot of modern blockbuster films are made in European countries nowadays, just funded and produced by Americans.

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Indeed. I mean, look at the most successful movies recently - The Dark Knight, Harry Potter, Lord Of The Rings, The Matrix... all have significant contributions from non-Americans, sometimes mostly non-Americans. It's just that Hollywood happens to have the money to make those projects a reality. Money injections, nothing to do with talent.

That's not to say that Americans don't have talent nor that they don't contribute, of course. But, to pretend that, say, The Hobbit can be produced with mostly British and Kiwi talent, filmed and have effects supplied in New Zealand, and then American copyright has to take precedent over NZ copyright because it's American money and NZ don't have their own US hits? Not a good argument.

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"Few Americans are lining up to see the top rated movies from Sweden in wide release in the US"

Only because you insist on remaking them instead. If Americans weren't so allergic to being exposed to other languages and cultures, things might be slightly different. Sadly, subtitles aren't a commercial option over there, though IMHO they can destroy a movie.

"The US makes a product that the Europeans want, and they don't make a product that Americans particularly want."

If you only look at the entertainment industry in isolation from other industries, perhaps (although I'm not sure of, say, the box office potential of the Steig Larsson movies vs. Hollywood movies at the time in Sweden. I'll have to look that up). Taking all trade as a whole, and I'm sure there's one or two Swedish companies that have a lot of export to the US...

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"Only because you insist on remaking them instead. If Americans weren't so allergic to being exposed to other languages and cultures, things might be slightly different. Sadly, subtitles aren't a commercial option over there, though IMHO they can destroy a movie."

Actually, the problem is the distribution channels. I had to watch Oldboy through unauthorized channels (hint: a friend gave me a DVD) because it's a movie you won't find in Best Buy. The ways to get to the foreign movie market are extremely limited. But the access to American movies is far easier to attain in other countries.

I'm not discounting the fact that most movies are remade for the American audience in mind, but there are a few extra provisions that make the American market quite unique(?)/difficult(?) to assess.

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Indeed, but the channels are often controlled by the same people. Some of those channels have a vested interest in blocking some movies from release (supposedly, films like REC and Ringu were deliberately withheld until after their US remakes were released, and the Weinsteins had a habit of buying foreign movies then refusing to release them).

It does work the same the other way round as well. I've spoken to numerous independent American producers and directors who have sold their films to the UK or Europe months or years before they made a domestic release, because the majors have everything so tied up.

Having said all that, I suspect that if demand could be generated for, say, the original film of The Girl With The Dragon Tattoo instead of the upcoming $100 million remake, then everyone would be better off. Distribution might be a major factor, but the mass audience seems to be allergic to foreign movies as well. A damn shame.